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This week the South African government has proposed measures to allow more institutions to provide exposure to commodity exchange traded funds and specifically gold and platinum ETFs.

02 Mar 2013

LONDON(Commodity Online): Deutsche Bank expects further inflows totalling 400koz this year into Platinum ETFs, which would be enough to tip the platinum market into deficit. At present around 1.5 million ounces are held across five platinum ETFs globally representing around 21% of Deutsche Bank's total projected demand for 2013 of 7.2moz

“Clearly any boost in demand for platinum from newly established funds in South Africa would also support out forecast for a sustained deficit in the market over the medium term.” the Bank said.

This week the South African government has proposed measures to allow more institutions to provide exposure to commodity exchange traded funds and specifically gold and platinum ETFs.

To date, investment by South African institutions and individuals in platinum and palladium ETFs have been limited as the investment formed part of offshore investment allowances.

The proposed classification of ETFs as domestic assets could see a boost for platinum as more qualifying institutions set up ETFs.

For palladium, ETF holdings represent around 19% of our 2013 total demand forecast of 9.3moz. Since the palladium market is already in deficit on our forecasts, any further demand from possible ETF products would increase this deficit still further.

For this reason we continue to prefer palladium over platinum over the medium term. In terms of the regional breakdown, the US and Europe represent just over 90% of listed commodity ETFs by AUM.

Other regions, and specifically the Middle East & Africa still constitute a very small share of commodity ETFs by AUM.


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